I understand that you are leading an Inquiry
into the background to and difficulties in implementing the European
Regulation 2037/2000 for the disposal of refrigerators and the
removal of the ozone depleting substances contained in the cooling
element and also the insulating foam between the inner and outer
casings.

In presenting this document, I endeavour to
deal with it in two parts. The first part being the background
leading up to the end of 2001 and the second part dealing with
matters that have occurred since 1 January 2002 and their implications.

As a Member of Parliament, you will be aware
that the EU Regulations pass automatically into British law and
insofar as 2037/2000 became EU Regulation in 2000, the whole of
the year 2001 was available for preparation for the implementation
of the Regulation on 1 January 2002. The Regulation quite clearly
calls for the destruction of ozone depleting substances contained
in refrigerators and no research is necessary for it to become
evident that the ozone depleting substance is contained not only
in the liquid and gaseous element within the cooling matrix but
also within the foam. Not only that, but the amount contained
within the foam represents some 70-80 per cent of all the ozone
depleting substance.

If we look at the way by which these refrigerators
were being disposed of prior to 1 January 2002, we recognise immediately
that it was unsatisfactory in environmental terms whilst satisfying
the then existing disposal requirements. The pattern of performance
was that lightweight suction equipment was applied to the cooling
matrix and removed about 15 per cent of the volunteer gas and
liquid element contained within that matrix. Our research has
indicated that the time allocated to this was in some cases as
little as 14-15 seconds. The then "degassed" refrigerator
was sent to the car crushing/fragmentiser plants for disposal
and thus the foam contained within the carcus of the refrigerator
was disposed of by the simple expedient of crushing it to dust,
enabling all the ozone depleting substances within it, and the
remaining liquid contained in the processor, to be sent to atmosphere.
Bearing in mind that ODS has a global impact between 6,000-8,000
times greater that that of carbon dioxide, it can be seen that
although legitimately satisfying the then regulations it was in
no way really addressing the disposal of the ozone depleting substances.

By October 2001 virtually every car crushing
plant/fragmentiser had begun refusing to take refrigerators and
the pile of discarded equipment began to grow. At the same time,
the "take back" system much operated by the retailers,
under which every time a new refrigerator was delivered to a house
the old or discarded refrigerator was in all probability collected
free of charge by the retailer concerned, and sent for processing,
ceased.

The argument advanced by HM Government that
they had no knowledge until June 2001 must be incorrect. What
they had on 16 June was confirmation from the EU that it was necessary
to dispose of the foam. That anybody would look at the proposition
and pretend that it was not going to be necessary to remove the
foam, bearing in mind the percentage of ozone depleting substance
contained within the foam, seems to evade all logic. In reality,
the most that can be said is that HM Government was hoping for
a reprieve which would enable the sands of time to run on until
the implementation of the WEEE Directive in 2005, at which time
producer responsibility would take over and the Government would
not be required to finance the cost of the disposal of the refrigerator
and its contents.

The reality therefore was that on 16 June 2001
it became evident that only a total solution was going to be satisfactory
under the EU Regulation. For those of us intent on providing the
necessary modern equipment for fulfilling the obligations under
the EU legislation it became clear that orders would have to be
placed for machinery on the basis that the quality of disposal
would be sufficiently good to satisfy the upcoming interpretation
of the Regulation.

In November this year we became the first company
in the United Kingdom to order a machine specifically designed
for the disposal of ozone depleting substances and the recovery
of all the component elements. This was placed with a well known
German firm called Erdwich who have 10 machines operating in Germany,
two in Taiwan and one in Japan. The reason I make this point is
that whilst considerable confusion continued to hold up DEFRA,
discussions had been going on with interested parties such as
ourselves, under the auspices of DEFRA to establish the criteria
that would be required to satisfy the EU legislation. In reality,
what was finally discussed and produced as a draft proposal, through
the good offices of a company called Caleb who had been retained
to prepare the actual document, was a higher standard that pertained
in Germany but not by an unreasonable amount. However, since that
was finally put into draft form in October no progress has actually
been made in finalising the specification as a published document
which can be relied upon. As a consequence, bank funding for further
machines is extremely limited because as far as they are concerned
they would want the satisfaction of knowing that the machine which
they are being asked to fund would meet the criteria. Certainly
individual companies such as ours could not take the risk of ordering
more than one £2.5 million machine without the comfort of
knowing that it would meet the specification.

We therefore have a situation where probably
four of five operators have acquired or ordered one machine each.
Those machines are coming and in most cases will arrive in the
United Kingdom in the period of time between June and September
2002. Another two months or thereabouts must then be allowed for
the installation of the equipment, so we are looking at production
becoming available from early August through until early October.
Because the lead time on one of these machines is something like
five months, it can be seen that the chances are that the first
machine will be installed and then there will be a further gap
whilst a further round of orders are placed and this is unnecessary
because all these matters could have been clarified well in advance
of today's date.

I enclose a press cutting from the Daily
Telegraph of 21 February 2002, which quite clearly shows that
the doubt that has pervaded the entire proceedings has definitely
served as a delay in putting machinery in and that many local
authorities are now faced with huge bills for storing and handling
refrigerators rather than being able to consider the more straightforward
process of arranging for their destruction. To put it another
way, had the government moved with normal alacrity, the machines
would have been installed and been shredding the equipment today
and it would have actually cost less money than it is at present
costing.

In my opening paragraphs I said that I would
also deal with the situation pertaining after 1 January 2002.
In the absence of the machinery being delivered and installed
during the autumn and winter of 2001, the opening of the new year
brought with it chaos. The local authorities believed that they
could store the refrigerators in the open but the Environment
Agency's ruling on this matter made it clear that this would not
be acceptable and standards were set. Additionally, many people
and companies were quoting local authorities for taking their
waste, storing it and arranging for it to be destroyed whilst
at the same time not being asked to show proof that they actually
had the facilities in order, if not installed. In many cases what
we had was nothing better than cowboy behaviour with operators
making promises they had not the slightest intention of fulfilling
or even the ability to fulfil them. At the same time prices were
being quoted that bore no relationship to the true cost of operating
a machine costing the sums of money involved, and it became a
totally unsettled market when no need existed for such a situation
to arise. The apex of this travesty arose at the end of January/early
part of February when it was discovered that an operator in the
North West had secured contracts from leading local authorities
for just such an operation. The refrigerators were being taken
to a store in Oldham and were being stacked as much as 40 feet
high, whilst the Environment Agency's regulation called for no
storage higher than 3 metres. Additionally, the manner of handling
these was lifting them into place with a grab crane and dropping
them onto the pile. Since they were not properly degassed, even
if there had been some token degassing, large amounts of ozone
depleting substances were escaping to the atmosphere. When tackled
over this, they closed the site and moved to another site, working
in conjunction with a waste company.

Furthermore, those local authorities who contracted
their work to a company clearly not competent in the processing
of redundant refrigerators must have been guilty of breach of
their duty of care and this failure of care should be hastily
rectified.

The essence of this one example illustrates
the problems that are faced by people who are undertaking to install
reliable, technically advanced equipment to meet the true requirements
of the Environment Agency and the European regulations.

For there to be any credibility in the market,
those who transgress must be stopped from continuing in this way,
whilst at the same time those who are undertaking to invest large
amounts of capital and enormous amounts of effort should be permitted
to proceed in the difficult situations which currently exist.
At a recent meeting of interested stakeholders organised by DEFRA,
it became quite clear that the one cry coming from all those genuinely
involved was for a level playing field where good practice, of
even better still best practice, should be encouraged. The worse
of all things that could happen would be for some of the investors
to become disenchanted with the behaviour of the rogue element
and as a result of that stop bringing in their equipment and risking
a situation where there was under capacity for the work to be
undertaken.

To summarise, there has been delay, there has
been difficulty in arriving at decisions and for those to be confirmed.
As a consequence the cost and the problems endemic within the
operation of this EU Regulation have been greatly compounded.
Nonetheless, equipment does not exist that could fulfil the best
aspirations for recycling. The costs could be sensibly controlled
by competition and those who would seek to behave in a totally
unrealistic and ruthless manner to confound all best practice
for the recycling of these ozone depleting substances could be
brought to book. It is only against that background, of some degree
of certainty and stability, that the real quality of investment
will be made and I trust that my presentation will in some measure
show a way forward.